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Facts
The assessee, an individual engaged in real estate consultancy, was subject to a search and seizure operation. Following the operation, additions were made by the Assessing Officer (A.O.) for unexplained credits and investments. The assessee failed to comply with notices issued by the Commissioner of Income Tax (Appeals) (CIT(A)).
Held
The Tribunal held that the ex-parte order passed by the CIT(A) was not sustainable due to non-compliance with natural justice principles. The Tribunal granted the assessee one more opportunity to substantiate their case before the A.O. subject to payment of costs.
Key Issues
Whether the ex-parte order passed by the CIT(A) for non-compliance is sustainable, and if a further opportunity for hearing should be granted to the assessee, subject to conditions.
Sections Cited
143(3), 153A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI JAGADISH
आदेश / O R D E R PER JAGADISH, A.M : Aforesaid appeals filed by the assessee for Assessment Years (AYs) 2013-14 to 2017-18 arise out of the common order of Learned Commissioner of Income Tax (Appeals), Chennai-18 [hereinafter “CIT(A)”] dated 23.01.2025.
to 922/Chny/2025 Chandrasekharan Giridharan :- 2 -:
The facts in all the appeals of the assessee are identical and issues are common hence, we proceed to pass a common order.
The assessee is an individual, engaged in consultancy of real estate, business facilitation etc. He is also Director, along with his spouse, Smt. Pooja Prabhakar, in M/s. Striad Ventures Pvt. Ltd. A search and seizure operation was carried out in the case of Sri C.P.Anbunathan at Karur on 22.04.2016 and consequently search was also conducted at the residential premises of the assessee on 10.05.2016. The A.O passed order u/s. 143(3) r.w.s 153A of the Act, making the following additions:
Addition A.Y A.Y A.Y A.Y A.Y 2017- towards 2013-14 2014-15 2015-16 2016-17 18 Unexplained credits in 1,10,03,703 3,41,72,472 9,37,47,940 3,59,81,550 30,47,775 bank accounts Income from -- 2,74,800 -- -- -- salary Unexplained -- 1,50,00,000 2,20,00,000 -- -- investment in property Unexplained -- -- -- 11,90,768 -- investment in gold jewellery
On appeal, the Ld. CIT(A) issued several notices; however, the assessee failed to comply. Consequently, the Ld. CIT(A) passed an to 922/Chny/2025 Chandrasekharan Giridharan :- 3 -: ex-parte order dismissing the assessee’s appeal and issuing following directions as stated in para 8.4:
“However, no evidences with regard to admitting the additional incomes in the hands of other members of his family / company was filed. In the absence of basic details of copies of income tax returns, computation and tax paid details, the version of the appellant, that additional income was offered in respective hands of other members / company, cannot be accepted. Therefore, the AO is directed to verify whether any returns of income were filed by the individuals / company as above and paid additional taxes, then corresponding relief be allowed in the hands of the appellant assessment year-wise. Therefore, subject to verification of the AO as above, the grounds of the appeal raised by the appellant are dismissed.”
At the outset, the Ld. Authorized Representative has submitted that the Ld. CIT(A) has passed the order ex-parte and therefore requested that one more opportunity be granted to the assessee. The Ld. AR has also argued that the Ld. CIT(A) has directed the A.O to make certain verification and therefore, the matter may be send back to the A.O.
On the other hand, the Ld. Departmental Representative (DR), relied on the orders of lower authorities and submitted that the orders were passed ex-parte as the assessee has been non-compliance with the notices issued.
We have heard the rival submissions, and perused the materials available on record. The A.O has made addition of unexplained credits to 922/Chny/2025 Chandrasekharan Giridharan :- 4 -: in bank account in all the years, unexplained investment in property in A.Y 2014-15 and A.Y 2015-16 and unexplained investment in gold jewellary in A.Y 2016-17. The Ld. CIT(A) has issued several notices, however the assessee failed to comply with the same. Therefore Ld CIT(A) has passed the order ex-parte. The A.O, also in the assessment order has made the addition stating that no documentary evidence has been provided in support of the submission. Therefore, considering the huge additions made, and keeping in view the principles of natural justice, the assessee should be granted one more opportunity of hearing to substantiate his case before the A.O subject to payment of costs of Rs.25,000/-. The cost shall be paid by the assessee to Tamil Nadu State Legal Services Authority at Hon’ble High Court of Madras within a period of two months from the date of receipt of this order and produce the receipt before the A.O.
Accordingly, we set aside the orders passed by the A.O and the Ld. CIT(A) and remit the matter back to the file of the A.O for denovo assessment. We also direct the assessee to appear before the A.O on the date of hearing without fail and furnish complete details for fresh consideration. In view of the above, all the appeals filed by the assessee are allowed for statistical purposes only. to 922/Chny/2025 Chandrasekharan Giridharan :- 5 -:
In the result, all the five appeals filed by the assessee are allowed for statistical purposes.
Order pronounced on 16th day of July, 2025 at Chennai.